mortgage-backed revenue bond

Mortgage-Backed Revenue Bond

A municipal bond that is issued in order to finance low-cost mortgages for residents of the municipality. The bonds are guaranteed by the payments made on these mortgages. In many ways, they are similar to mortgage-backed securities, but they are issued by a local government instead of private entity. A mortgage-backed revenue bond is also called a housing bond.

mortgage-backed revenue bond

A municipal bond, the proceeds of which are used to provide funds to financial institutions for making mortgage loans at relatively low interest rates. Interest and principal on the bond are backed by borrower payments on the mortgages. As with other revenue bonds, the quality varies significantly among different issues of these securities. Also called housing bond.

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